Monthly Archives: Aug 2015

Automation hype and anxiety is everywhere today. In fact, haven't you been amazed by the emergence of all these "automation experts" that have suddenly appeared on your LinkedIn recently? It's as if these people went to school 20 years ago with the sole purpose of becoming an automation expert...

However, I have good news for the paranoid - computers are still really bad at simulating social interaction. What's more, team work is becoming more critical than ever, as we need to keep adapting to a changing work environment. Your personality and ability to excite, befriend, intellectually stimulate, or just have a laugh with the people around you, is now more critical than ever.

Welcome to the socially-intelligent workforce, where your reputation is everything

What's more, there is nowhere to hide anymore - if you repeatedly behave badly, back-stab, lie, or are just an asshole to work with, your reputation will spread across the digital and social networks, like it never did in the past. When smart future employers check you out, it's so easy to find former colleagues to conduct informal background checks. There is no hiding anymore, so prepare yourself for the socially intelligent workforce, or scramble for one of those fast-disappearing legacy jobs, where you can hide away for years, unnoticed by the world.

Your ability to interact with people, applying intelligence and creativity to your craft, is where you add value

People, increasingly, want to work with people they like and people who spark positive energy, first and foremost, as technology continually makes jobs more sophisticated and intelligent. I don't need an accountant who can tell me my revenues this month, as I have software that can do this for me easily... I need an accountant who can talk me through the nuances of sunsetting a legacy product and its impact on my profit line. I don't need a lawyer who can create employment contracts - I can pull these off Legal Zoom... I need one who can talk through the nuances of creating incentive

Insurance is priming the pump for industry-centric As-a-Service solutions. The insurance space is one of those industries where it's all in the sales, marketing and customer experience, so the more the delivery engine can he standardized and run efficiently, the more cost savings can be passed onto the customer and intelligent data to the service provider to set their policies, pricing and future strategies.

Insurance majors were among the first Western enterprises to open offshore captive centers in India and Philippines to process and adjudicate clients, support customer service etc. However, the main issue that has long-plagued the carriers has been finding value beyond the initial offshore cost-savings. I personally recall hosting a roundtable of eleven major insurance BPO clients five years' ago, and the common consensus was "The only way to find incremental value is by tech-enabling our processes".

So has this industry been making genuine progress as we evolve to the As-a-Service model? So who better to ask than the one analyst who has been tracking this space intensely ever since she joined HfS four years ago, Reetika Joshi:

Click to Enlarge

What is “Insurance As-a-Service” and how is it different from insurance BPO?

Phil, insurance is a mature market for BPO – core insurance processes like claims processing have been outsourced for over a decade now. Our discussions with property & casualty (P&C) and life &

During Part I, we discussed the gradual simplification of cumbersome people-centric outsourcing towards technology-centric "As-a-Service" solutions, driven by the need for enterprises to remove their excessive operations costs and anti-competitiveness burdens inflicted by legacy processes and obsolete technology.

Simply put, what worked last decade no longer works for ambitious enterprises striving to stay competitive, plus the emerging "Born in the Cloud" enterprises, many of which will comprise tomorrow's FORTUNE 500, where As-a-Service is native to their operations, not retro-fitted in painful increments. Their mantra is to invest in outcome-centric services first, then hire talent to broker these capabilities and align them to the revenue-generating activities of the business.

Gone are the days when the only solutions were to reduce labor costs and hope for the best. Arriving are the days where investments in outcome-driven solutions, fueled by common standards and automation, ubiquitous cloud delivery, digital tools and apps, are being seen to have genuine long-term ROI. Enterprise leaders, in our discussions, are much more willing to make investments in permanent solutions, where the outcomes are tangible, as opposed to temporary solutions, where there is some short-term benefit, but the long term outcomes are still murky and unclear.

We know the future is moving towards a state of creative, motivated operators accessing available tools and intelligent platforms to help their enterprises achieve their desired outcomes. We know most viable enterprises, today, cannot afford to drag around these archaic, obsolete infrastructures and operations - and remain competitive in the long-term.

So what, pray tell, is really driving our enterprises to make decisions today, what will our world really look like in five years' time as a result, and what are the implications for society and business? Oh the questions that need answering...

Two-thirds of enterprises are actively pursuing strategies to reduce reliance on human capital

"How much of this room will be replaced by bots in the next three years?" I asked, polling some peers and colleagues deep in client-side automation research attending a recent service provider conference.

"As many as 60%" was the collective response - 30% directly through improved automation capability and another 30% simply through better apps and efficient processes". Just think about that for a minute... we're really on an path away from people to technology. So why are so many services and operations professionals so blissfully unconcerned of what's coming? Are we living in permanent state of denial that the business world around us is simply never going to change? It's not as if the majority of senior operations leaders do not see As-a-Service as critical, according to our new Ideals of As-a-Service study:

Click to Enlarge

So, while the leadership layer is clearly bought in and ready to go, why aren't the operational middle and junior layers following suit? Why aren't these leadership ambitions being translated down through the ranks? Why does this desire to challenge ourselves and improve our capabilities dissipate when we reach the rank and file?

Ignore this at your peril... but we really are at the early stages of a "Digital Revolution", which will ultimately have an impact as seismic as the Industrial Revolution of the 19th century, which left us with entire workforces untrained and unskilled for what was needed next. The same is happening today - and we need to get ahead of this by being unafraid to reorient our capabilities and career trajectories.

The last 30-40 years has merely been pre-amble as enterprises leveraged globalization and technology to lower costs, automate and standardize processes (ERP, apps, offshore-nearshore outsourcing) and consumers to improve their lives (PCs, mobile, social). However, these are only the baby steps, where we experimented on what we ultimately needed from technology. Today's emerging generation has digital at the core of both their home and work lives, while the more mature generations are trying to retrofit digital into our (becoming) obsolete business processes and social lives. The big shifts are starting

If I had a dollar for every scuba-diving triathlete mom who specializes in the art of service buyer/provider relationship management and governance strategy for a big 4 management consultancy... I really wouldn't be very rich.

Liz Evans has been at this for several years now, from the early days of Equaterra, where she was marriage counseling for most of the broken outsourcing deals in the industry, through to KPMG where she has molded her craft into the GBS governance functions of many of the largest enterprises in the world.

Not bad for a nice lass from a town called Middlesbrough, somewhere up in the north of England, who's firmly implanted herself as a governance therapist in many North American boardrooms (when she's managed to yank herself away from her Lego-addicted kids).

So, after all these years since we last spoke, we thought high time to get reacquainted with Liz to find out just how much things have changed in the industry...

Phil Fersht, CEO, HfS Research: Liz, it's great to talk with you again. I think it's been five years since we last spoke to you on the blog. You've built quite the reputation at KPMG these days for leading a lot of the governance strategy and how clients are maturing post-transaction. I think our readers would like to hear a bit from you about your background and some of the early days in your career, and how you ended up becoming such a respected governance and relationship management practitioner in the industry.

Liz Evans, Managing Director Governance, KPMG: Thanks Phil - it's great to speak to you. You know, I did a conference—a Governance roundtable last October—and one of the sessions was on talent management. The first question I asked the audience was, "Put your hands up if, when you left university, you wanted to be a governance professional." Shockingly, no-one raised their hands. And I have to say I am in the same boat. So I think the route into governance and this industry is often an interesting one.

I started off doing outsourcing deals way back in the mid-‘90s. And I actually focused much more on service levels. And then was asked to look at the structure of how you manage those on an ongoing basis. It kind of led me down the road as well. Service levels and service credit really are not all there is to a relationship—it's much broader. I think the rest, as they say, is history from there. When I joined EquaTerra in 2005, I had the opportunity to really spend my time focusing on

When we coined the term "The As-a-Service Economy" a year ago (remember our famous Ten Tenets post), we never quite anticipated we were helping define the future model the services industry would adopt for business, technology and operational service delivery.

As-a-Service replaces Outsourcing

We've perennially debated the (toxic) term "outsourcing", long vilified as the substitution of onshore jobs with cheaper offshore people. The outsourcing community has continually struggled to find new defining terminology, as NASSCOM replaced "BPO" with "BPM" and the IAOP has refused to shift from the past, staying true to the O word as its core identity.

The reason why we struggled with our identity was because outsourcing, by and large, has really always been about people. It's hard to change processes, drive common standards across clients, build a utility model that can be scaled and made cost-efficient, when you're really just moving work around the world with the goal of getting it done cheaper. And that's really been the story of outsourcing to-date - service providers battling it out, at varying levels of effectiveness, to deliver people-based services more productively, promising delights of delivery beyond merely doing the existing stuff significantly cheaper and (hopefully) a bit better.

But outsourcing hasn't failed. Only 13% of service buyers in our new Ideals of As-a-Service study believe there is no more value to be found in the current outsourcing model. Outsourcing is the starting point towards driving out bloated labor costs, centralizing the delivery staff within a service provider, and creating some basic common standards across processes. However, it's not the end-solution for ambitious firms, it's merely the start of the journey towards this future vision of "As-a-Service".

We also hear a lot of hype about Robotic Process Automation, which is another accelerator towards As-a-Service, but like outsourcing, RPA isn't necessarily the end-solution either - many applications have a lifecycle and are replaced over time, and many of today's processes become obsolete as businesses evolve. RPA merely acts as a further conduit, coupled with outsourcing, to smooth the ultimate journey towards destination As-a-Service.

Defining the evolution to the As-a-Service Economy with Eight Ideals

The game-changer is centered on today's services work gradually becoming a genuine blending of people-plus-technology that helps us inch towards an ultimate destination of services value, accessible on-tap, empowering service buyers to focus on proactive value-identification with help from their service partners through meaningful and secure data, enabled by intelligent automation and digital tools... all made possible by smart people working together.

So let's examine the Eight Ideals of As-a-Service, into which we delve in-depth in our new defining report, "Beware of the Smoke: Your Platform is Burning", that canvasses the views, dynamics, aspirations and intended actions of 716 service industry stakeholders:

Click to Enlarge

The journey to As-a-Service is all about simplification

Business services, today, are one of speed to business impact. They are about simplification. They are about removing the blockages and obstacles diluting this business impact. Anything less is not taking advantage of the experience and capability that has been developed in the global services market, over the past three decades. In this time, enabling technologies, talent, sourcing operating models, and macro-economic trends, such as globalization of labor, high growth emerging markets, new business models and consumerization, enable service buyers, advisors, and service providers to engage increasingly in a more flexible and collaborative manner. The ambition is to achieve renewed business results with speed, quality, and effectiveness. When we get there, we will be in the As-a-Service Economy.

The transition to As-a-Service is all about simplification — removing unnecessary complexity, poor processes, and manual intervention to make way for a more nimble way of running a business. It is also about prioritizing where to focus investments to achieve maximum benefit and impact for the business from its operations.

The emerging As-a-Service Economy will be more agile and dynamic, featuring on-demand plug-and-play services in a one-to-many fashion targeted to impact what matters to consumers as well as businesses. The two are increasingly intertwined as consumer insights, decisions, and loyalty carry increasing weight on the success or failure of an enterprise in any industry.

The Bottom-line: The As-a-Service Economy is a vision for the future, building on today's achievements

It's easy to deplore how poorly our business are run, how dysfunctional are our processes, how badly integrated are our technologies, how reactively and transactionally our staff perform. But this is the evolution of business, this is how we got here today. When you talk to service buyers, they are unlikely to tell you their businesses are running worse every year. In fact, most have improved immensely over the last five years with improvements in global scale delivery, cloud computing etc.

Survival in today's global business environment, for most, is a marathon, not a sprint. Not every industry has been Uberized over-night - most are being disrupted with technology-driven business models that we can learn from, adapt, adjust and try to get ahead of. Most enterprises suffer from the same woes and face similar challenges to clear their path towards their desired As-a-Service Ideals.

The new challenge is to prioritize which Ideals really matter and how to work with the smart people and partners around us to get there. In subsequent posts to this theme, we will analyze our study findings further to understand the priorities, obstacles, expectations and anticipated dynamics to unravel how we will eventually arrive at the As-a-Service Economy, and what we can do as an industry to get there and prosper.

Please download a copy of our new Industry Report "Beware of the Smoke: Your Platform is Burning", authored by analysts Phil Fersht and Barbra McGann, that analyzes findings from 716 service industry stakeholders in our new Industry study that defines the future of services and the emergence of As-a-Service Economy.

The lifeblood of the IT outsourcing industry has always been application testing - it's not sexy, but it's a huge portion of ITO spending - and massively important to the revenues of the major ITOs.

And while much of the traditional app testing market is commoditizing, with advances in remote management and automation, the proliferation of digital apps (social, mobile, analytics) and related technologies are creating renewed growth and market demand for testing. Here at HfS, we have watched this development closely. And, with Tom Reuner on board as Managing Director for IT Outsourcing Research, we thought it high time to take our Blueprint microscope and have a close look at application testing services. Tom worked feverishly over the past couple of months to prepare the Blueprint, along with HfS Executive Vice President, Research Charles Sutherland. The result is a groundbreaking Blueprint report:

Click to Enlarge

So let's get an up-close view of the report from the man himself, Tom Reuner:

So what's new in App testing these days, Tom?

Thanks Phil, in order to answer your question, I have to start by going one step back and outline where the industry is, as there is little reference material from analysts and third-party advisors. The notion of independent testing is evolving where services are not just bundled as part of an IT outsourcing contract but are delivered as a stand-alone offering. But, broadly speaking, testing services lag most IT service lines in terms of mindshare and broader visibility. A lack of investment,

Yes, I have been trying hard – and failing miserably – to avoid using the term “Uberization”, but it’s everywhere! Even in the analyst business, where the sharing platform is the Internet and any old whackjob can get in on the act. All you need is a computer and an ability to write remedial English.

The technology and services industry today is awash with individuals whose only professional activity is flitting from vendor conference to vendor conference, with the sole purpose of writing completely non-objective puff pieces praising their vendor hosts in exchange for money (or in the hope said vendors will pony up some dough in gratitude). Vendors are only too willing to pay these

I recall when I founded HfS Research nearly six years' ago, one of the first people to visit our offices was the calm, but tenacious Sangita Singh - one of the most recognizable and popular faces of Wipro over the last decade.

Since then, Sangita has made a regular habit of visiting us at HfS during her analyst rounds in the Massachusetts area - a location right at the heart of many of her life sciences and healthcare clients. And what amazes me about Sangita is the fact she manages to (somehow) live simultaneously in both Manhattan and Bangalore at the same time, in the midst of all this merger-mania in healthcare.

While Wipro has built a reputation for helping to drive cost savings and provide IT and business process support and capability, Sangita is on a mission to take her firm's healthcare solutions to the next level, by working with clients and partners to build connections between the many silos in today's US healthcare system. At the heart of it is how to better serve the patients with the right combination of services and technologies in a more simplified and accessible way. It requires a different way of working both within Wipro, and with clients. It’s a big, bold dream, but that’s what gets her excited.

So when we convinced Barbra McGann to join us to lead our analyst coverage of healthcare and life sciences, I couldn't resist introducing her to Sangita... and lo and behold the two of them cooked up a little interview for our reading pleasure...

Barbra McGann (Managing Director, Research at HfS): Sangita, your career has lately been a smorgasbord of specialized leadership roles, from an education in engineering, to most recently at Wipro as Chief Marketing Officer, then Head of Enterprise Application Services (EAS), and now, Chief Executive of Healthcare and Life Sciences. What is your approach to tackling each of these very different areas of expertise as a leader?

Sangita Singh (Chief Executive, Healthcare Life Sciences & Services at Wipro): Hi Barbra - it is to be open to listening and learning—from the team, from peers, from management, from the external environment, and to be inclusive. One thing that defines me is my curiosity—my willingness to not take myself too seriously and be willing to learn from anybody and everybody. That provides the input. Then I do three things: First, I carve out a really audacious big bold dream that can be called strategic vision, that I remain consumed by. Then I try to spend hours and hours getting my entire team inspired and on the same page with respect to that dream. Therefore, the second aspect is

The As-a-Service Economy is all about achieving the outcomes we most want with a great service experience. So let's look at how to avoid that not happening and becoming legacy businesses that failed to stay ahead of the demand curve.

The perfect anti-example is Subway. Back in 2001, the release of Fast Food nation shocked much of the Western world into realizing we were slowly killing ourselves on pink-slime infused fast food. It was great for Subway as it sold sandwiches that - for all intents and purposed at the time - we thought were a far healthier option than Burger King. And it seemed to taste OK too...

Fast forward to today - people are increasingly aware that chemically-preserved fake colored bread, cheap antibiotic-induced meats and pesticide-flavored vegetables aren't much worse for you than a greasy concoction of pink slime, protein and french fries.

Coupled with this is the service experience - I accidentally ventured into a Subway the other day (one of those once-in-every-five yearly visits, where you are just so damn hungry and want to avoid the golden arches). The only desired outcome